Human capital & corporate risk
The maximum pensionable salary has been frozen at €137,800 since 2024. The new cabinet has announced that it will continue this freeze for another six years after this year. The measure limits the tax-facilitated pension accrual for higher incomes.
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The maximum pensionable salary was introduced in 2015. It aimed to reduce fiscal costs and thus increase solidarity.
Since then, the limit has been indexed annually based on wage developments. In 2024, indexation was stopped. The new cabinet has announced that the freeze will be extended by six years.
Employees with an income above €137,800, often employees in key positions within your company, will accrue significantly less pension in the coming years compared to the situation where annual indexation would take place. Because where the capped salary remains the same, the state pension franchise does index. As a result, the backlog is increasing.
The example below shows how the difference in pension contributions increases when the maximum pensionable salary is no longer indexed.
Higher income groups will face a significant reduction in their pension accrual. Over nine years, with an indexation of 3%, this can amount to just under €40,000 in foregone contributions.
But it does not only have consequences for pension accrual. The partner's and orphan's pension are also no longer indexed with the salary. This increases the risk of a substantial income decline not only in retirement, but also in the event of death during employment.
At the same time as the introduction of maximum pension accrual, the tax authorities offered employees alternatives. The net pension (via the employer) and the net annuity (individual) accrue a pension and also provide for the next of kin. The employee pays the contributions for this from the net income. However, the invested capital is exempt from box 3 taxation.
The enthusiasm for this is limited. There are few providers and employers are often not waiting for the extra administrative burdens.
In 2015, employers in sectors with average higher wages therefore opted for compensation via salary. It is fair to say that, now that it has been determined that the flattening of pension accrual will continue for at least another six years, the compensation issue comes to the table again.
We can only conclude that we are also dealing with a further narrowing of the pension file now. This time, a limited group of employees will be affected. But we do not rule out that political The Hague will decide at some point to equate the maximum pensionable salary to the maximum daily wage. And then the group is suddenly a lot larger.
The measure to permanently limit pension accrual for higher incomes has not received much media attention. There is therefore a chance that your employees are not yet aware of this. So inform them on time.
